Gary Perrens from TaxAssist answers your tax question
11th May 2017
... Comments

Gary Perrens, owner of TaxAssist Accountants in Sudbury, answers your tax related questions

May day! I still haven't completed my tax return


I’ve been working non-stop since I started my own business, but this has meant that I haven’t yet got around to submitting my 2015/16 tax return. How much will it cost me in penalties?


You will be liable to pay at least an initial £100 penalty – even if there is less than £100 tax to pay. Do bear in mind that the longer you delay submitting your tax return, the more it will cost you.

Following that initial £100 penalty, you will be subject to:

  • ·         After three months: additional daily penalties of £10 per day – up to a maximum of £900
  • ·         After six months: a further penalty of 5% of the tax due or £300 – whichever is greater
  • ·         After 12 months: another 5% of the tax due or £300 – whichever is greater. In more serious cases, the penalty after 12 months can be           up to 100% of the tax due

Each of these penalties is in addition to one another, meaning a tax return filed a year late could be subject to penalties of at least £1,600 – which could increase, depending on the level of tax due.

You may also be liable for interest and late payment penalties on top if you delay paying any tax due. Tax payments are normally due on 31st January and sometimes the following 31st July – depending on the level of tax liability.

If you’d like any assistance, please call your local TaxAssist Accountant on 01787 699 141


When will Making Tax Digital affect me?


I’ve heard that there has been delay in introducing the Making Tax Digital initiative, but could you tell me when it will affect my business?


Philip Hammond stated that Making Tax Digital would be deferred by one year until April 2019 for unincorporated businesses and landlords with turnovers below the VAT registration threshold of £85,000.

This is intended to provide them with additional time to prepare for digital record keeping and quarterly updates.

At the date of writing, Making Tax Digital will be rolled out as follows:

April 2018 – Quarterly reporting will begin for businesses (including landlords) who have a turnover above the VAT registration threshold of £85,000.

April 2019 – Quarterly reporting for businesses (including landlords) who have turnovers under the £85,000 VAT registration threshold. Digital quarterly reporting for VAT is also due to start.

April 2020 – Quarterly reporting for companies will be introduced. Businesses, self-employed people and landlords who have a turnover below £10,000 are exempt from these requirements. If you are in employment and have secondary income of more than £10,000 per year through self-employment, you will also need to use the digital service.

If you do not have a 5th April accounts year end your obligations may be slightly different.

Please be aware that the dates listed above may be subject to change following the snap General Election on 8th June and feedback from a pilot scheme which began on 3rd April 2017.

If you need more information and help getting your business ready for Making Tax Digital, call us today on 01787 699 141


Making Tax Digital and partnerships


What implications will Making Tax Digital have on my business partnership – will all my partners have to update our digital records?


HM Revenue & Customs carried out an impact assessment that revealed about 400,000 partnerships will be affected by Making Tax Digital.

However, only one nominated partner will be required to fulfil your company’s Making Tax Digital obligations. This will include ensuring your business’ digital records are kept up to date and providing regular updates on behalf of all the partners.

Each partner’s estimated income should be based on the profit allocation as reported to HM Revenue & Customs (HMRC). This means each partner will not be required to have their own copy of the software, maintain their own digital records or regularly update HMRC – unless they have other business interests.

Although it has yet to be confirmed what the exact thresholds for partnerships will be, it is likely that the largest partnerships with fee income more than £10 million will not have to report under Making Tax Digital.

As with all matters relating to Making Tax Digital, these could be subject to change after Making Tax Digital was removed from a revised Finance Bill 2017 due to the snap General Election on 8th June.


If you need more information and help getting your business ready for Making Tax Digital, call us today on 01787 699 141

About the Author

Penny W

Member since: 17th March 2014

Hello! I'm Penny from thebestof Sudbury, shouting about the best local businesses from Hadleigh through the Clare. When I'm not doing that, you'll find me knitting socks or tending to my 6 chickens

Popular Categories